Silent misery: Actual US unemployment 37.2%, record number of households on food stamps in 2013

A girl pays for her mother's groceries using Electronic Benefits Transfer (EBT) tokens, more commonly known as Food Stamps, at the GrowNYC Greenmarket in Union Square on September 18, 2013 in New York City. (Andrew Burton/Getty Images/AFP) / AFP

As the White House proclaims a recovery is occurring, and the stock market has a head of steam, millions of Americans and their dependents are being left out of the recovery, according to a set of economic indicators.

Perhaps the most worrying yet least reported aspect of the
so-called US recovery involves the national labor picture.
Although the official US unemployment rate is 6.7 percent, this
figure obscures the reality, according to an influential Wall
Street adviser.

In a leaked memo to clients, David John Marotta calculates the
actual unemployment rate of Americans out of work at an
astronomic 37.2 percent, as opposed to the 6.7 percent claimed by
the Federal Reserve.

“The unemployment rate only describes people who are
currently working or looking for work,” he said.

“Unemployment in its truest definition, meaning the portion
of people who do not have any job, is 37.2 percent. This number
obviously includes some people who are not or never plan to seek
employment. But it does describe how many people are not able to,
do not want to or cannot find a way to work,” he and
colleague Megan Russell reveal in their client report, which was
leaked to the Washington Examiner.

Contrary to expectations, a drop in the unemployment rate,
Marotta argues, is presently a sign that the unemployed are
simply dropping out of the job market.

The “officially-reported unemployment numbers decrease when
enough time passes to discourage the unemployed from looking for
work,” said Marotta andRussel. “A decrease is not
necessarily beneficial; an increase is clearly detrimental.”

The authors then take aim at the so-called Misery Index, which
provides something of a pulse rate of American prosperity, based
on unemployment and inflation. The Wall Street adviser said the
Index, which he maintains is actually over 14, as opposed to the
8 advertised by Washington, fails to address how the US economy
is being hugely subsidized by various schemes, including monthly
bond
purchases by the Federal Reserve.

“Today, the Misery Index would be 7.54 using official
numbers,” the two analysts wrote. However, taking into
consideration the full unemployment picture, including workers
who have given up the job search, which is 10.2 percent, together
with the historical method of calculating inflation, which is now
4.5 percent, ‘the current misery index is closer to 14.7.”

In food stamps we trust

Marotta’s findings, which put the actual US unemployment rate at
over 37 percent, seem more credible when viewed alongside other
indicators, including the number of Americans who now rely on
government assistance to make ends meet.

It has just been reported that a record 20 percent of American
households were receiving food stamps in 2013, according to data
from the US Department of Agriculture (USDA).

The USDA data shows there were 23,052,388 households on food
stamps in an average month of fiscal 2013, a jump of 722,675 from
fiscal year 2012, when there were 22,329,713 households on food
stamps per month on average.

Last year, according to data from the Census Bureau, there were
115,013,000 households. With 23,052,388 households – or 20
percent of the total number of households –now dependent on food
stamps.

In just half a decade, the number of American households on food
stamps has significantly increased. In fiscal year 2009, for
example, the number of households receiving the government
assistance program was 15,232,115. Five years later, in 2013,
that number had surged by 51.3 percent to hit 23,052,388
households.

Meanwhile, the monthly average for individuals on food stamps hit
an all-time-high of 47,636,084, according to the USDA. This is an
increase of 1,027,012 over the 46,609,072 people who were getting
food stamps in 2012.

In 2009, the number of individuals relying on the government
program stood at 33,489,975. In 2013, the number was 47,636,084,
an increase of 42.2 percent.

It should come as no surprise that spending on the US
government’s food stamp program, officially known as the
Supplemental Nutrition Assistance Program (SNAP), has reached an
all-time high.